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Out of Pocket Costs
Out of pocket costs - Shannon Staeb. Edited by Zienab Beydoun (Underlined) A health savings account is similar to many saving funds because it is an account where money can be put away and designated for health-related expenses tax free. The downside of an account such as this is that it required one to be on a high deductible health care plan. Due to the high deductible health care plan, the monthly premiums for the health insurance plan is more inexpensive than most health plan premiums. Prior to the health savings account becoming affective and beneficial for the patient they must reach their deductible, making this sometimes a disadvantage to the plan. Great aspects of the health savings account include that others can contribute to the health savings account. For example, if someone passes away and designates funds to beneficiaries those funds can then be used to enroll in a health savings account without being taxed. Further benefits of the health savings account include: pre-tax contributions, tax-deductible contributions, tax-free withdrawals, earnings are tax free, funds can roll over, the money can be transferred as health insurances are changed, and the health savings account is very efficient as it is used as a debit card for health care (Folger, 2018). Cons of a health savings account are often that there is a high deductible requirement, there are unexpected health care costs, there are taxes and penalties if the money is withdrawn prior to the age of 65, and occasional unexpected fees (Folger, 2018). All in all, this method is beneficial and efficient if one is willing to put money aside for health care and pay high deductibles. Using a flexible spending account works differently from a HSA in that only so much of the money can be used, it must be approved by one’s employer and it must be used within one years’ time ("Health Care Options, Using a Flexible Spending Account FSA", 2018). How this account works is that one can put aside money through work for their healthcare services, but not premiums. Once one decides to use this money for a health care service, they must submit a claim through their employer with proof of receiving the medical service in order to have the funds applied. Additionally, $2650 is the maximum funds allowed regarding flexible spending accounts and must be spent within one year, otherwise only $500 dollars of that money will not be rolled over ("Health Care Options, Using a Flexible Spending Account FSA", 2018). This account is not as beneficial and efficient to use for patients but is still a great option for many patients. When discussing patient's out of pocket costs, it is imperative to also discuss the costs associated with hospitalization. This is especially important amongst young and otherwise healthy adults who are unexpectedly hospitalized. In a study performed titled "Out-Of-Pocket Spending for Hospitalizations Among Non-elderly Adults", the total costs of deductibles, co-payments, and co-insurances encompassed the out-of-pocket costs attributed (Adrion, et al., 2016). The study concluded that the "mean out-of-pocket spending among commercially insured adults exceeded $1000 per inpatient hospitalization" (Adrion, et al., 2016). This increased bill could have a huge negative financial impact on someone who is unprepared.